The information provided here is part of Export Import Online Tutorial
In this article, I will explain about Ex Factory Price used in any business, especially in Export and Import business. What is Ex Works cost? Is Ex-works and Ex-factory same under delivery terms in an international trade? How does Ex Works terms of delivery work?
Ex works price and Ex-factory price are on of the same term. Ex factory or Ex works term is one of the delivery terms used in exports and imports.
What is ‘Ex-factory’ terms in Imports and Exports: Ex-factory price means, the selling cost of goods from Seller's factory. All other expenses from the factory of seller to buyer's premise has to be born by the buyer. So the responsibility of getting goods from the seller’s factory is with the buyer. Here the buyer appoints a shipping and freight forwarding company to collect goods from the seller’s factory to the buyers place including insurance of goods.
I will explain Ex-factory terms of delivery with a simple example. You are a Machinary seller situated in a place near Mumbai, India. The buyer is situated in New york. You are the seller of goods and you have contracted with the buyer and agreed to sell the goods on ex-factory price of USD 5000. Here the selling cost of goods is USD 5000 ex-factory. As I have explained, all further cost to reach the goods to the buyers place has to be met by the buyer. As per the instruction given by the buyer, freight forwarder contact his counterpart in Mumbai and arrange pick up of goods from seller’s factory. Seller delivers goods to the freight forwarder after confirming the authenticity of the freight forwarder through his buyer. All expenses of freight forwarder will be paid by the buyer. Buyer arrange to insure the goods and pay the cost of insurance. Also read - Difference between Ex works and FOB
Here, I have explained about Ex Factory terms used in exports and imports. Would you like to share your experience in handling Ex works terms of delivery? Share your understanding about Ex works terms used in international trade.
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Detailed articles about Inco Terms of Delivery under export and import of International business have been mentioned in separate category – INCO TERMS – in this web site. You can click here to read.
The above information is a part of Import Export Training online
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